Tuesday, November 24, 2009

Aussie economy lures foreign property investors

Australia’s resurgent economy has lured a string of offshore commercial property investors to its shores, many betting the rebound will underpin market competitiveness in the face of a soaring local currency.

Two German firms, property fund manager Deka Immobilien and asset manager Commerz Real, are eyeing Australia as an investment location. South Korea’s National Pension Service and US private equity firm Carlyle Group are reportedly in talks to buy a Sydney office building for A$700 million (S$896 million).

Deka Immobilien managing director Thomas Schmengler said the firm, a unit of DekaBank, was attracted by the strong fundamentals of Australian property, and the fact that the nation’s economic downturn did not become a recession. ‘Our Australian investments are fully hedged on the currency side, thus the exchange rate fluctuations do not influence our investment strategy,’ he said.

Research firm DTZ said the volume of commercial real estate sales in Australia grew by 1.2 per cent to A$2.28 billion in the third quarter from the previous quarter, with foreign investors accounting for 22 per cent of that, from 16 per cent. That trend looks set to continue as offshore companies look to finalise acquisitions.

Hans-Joachim Kuhl, head of real estate acquisitions for Commerz Real, said talks were ‘well underway for our closed-end real estate funds segment (in Australia), where commitments have a far broader equity basis’.

Source: Business Times, 24 Nov 2009

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